THE MOLE

Malthusian logic

FEBRUARY 14, 2003

The Mole was down at the butcher's the other day in search of decent sausages (they are so hard to find these days) when he noticed that the butcher was wearing an MCC tie. The Mole was left with a question he dared not ask: Was the butcher really one of the 22,000 members of the Marylebone Cricket Club, the organisation which presides over what they call The Laws of Cricket? This did not seem very likely as there is an 18-year waiting list to become a full member of the club and The Mole concluded, as only an Englishman could, that he must have picked up the tie in a jumble sale, probably from the wardrobe of an MCC member who had been sent to the great pavilion in the sky by the Big White Umpire.

As the waiting list seems to indicate, cricket is to the English an activity of great import, even if these days we are not very good at it. There are, of course, old gentlemen who believe that cricket has never been the same since players became professionals and started wearing sponsored clothing rather than white flannels and, on balance, The Mole tends to agree with them.

Times change, however, and today the MCC is presided over by Sir Tim Rice, who is most famous for writing musicals such as Jesus Christ Superstar and Evita and for film scores such as The Lion King. He less well known as the author of an Ode to Didcot Power Station. He was knighted in 1994, has won four Tonys, three Oscars and is a Disney Legend.

The Mole, while not wishing to be a stick in the mud, feels that by this logic, the president of the FIA ought to have been the late George Harrison, a wellknown Formula 1 fan.

Motor racing was once the preserve of wealthy gentlemen (butchers were definitely not allowed to take part) although it was not long before factory teams emerged and understood that the value of victory far outweighs the salary of a hired man. Since that day salaries have done nothing but increase.

The Mole believes that drivers are usually paid what they are worth. Michael Schumacher wins races and so his market value is very high. Once in a while a team will make a big mistake. Eddie Irvine's deal with Jaguar Racing was a classic piece of corporate insanity but the people in Detroit have only themselves to blame for not understanding what they were doing. Jacques Villeneuve's deal with BAR is a similar story.

The name that is on everyone's lips at the moment is that of Giancarlo Fisichella, widely considered to be a mature talent in search of a good car. Fisichella needs to be in a competitive drive before it is too late and so it was no surprise last week when the Roman driver declared himself to be on the market for next year. He later recanted and said some nice things about his current employer Jordan but by then he had made his point. He wants a drive with Ferrari, McLaren or Williams.

Of the men currently employed to fill these top six seats, Ralf Schumacher, Rubens Barrichello and David Coulthard may possibly be on the move. It is fairly clear that Kimi Raikkonen, Juan Pablo Montoya and Michael Schumacher will remain where they are.

Or will they?

The big issue is whether Michael Schumacher will agree to take a pay cut at Ferrari. Despite its rosy showing in Grand Prix racing in recent years, Ferrari has been spending most of its profits on the F1 team. The world is changing and last year Ferrari took on shareholders. They are bankers. They are in it for the money. Ferrari is a profitable company but there is a problem: it can sell every car it produces and cannot expand production for fear that it will dilute the exclusive Ferrari brand. Chairman Luca di Montezemolo's answer to this problem has been to diversify. He is trying to turn sister company Maserati into "a nice little earner" and at the same time is using the Prancing Horse logo as a brand, which represents success, glamour, sex and money. His aim is to make a pile of money from branded luxury goods.

This is fine in theory but it has yet to happen and in the interim Ferrari is looking at other ways to improve the balance sheet. And that means cost-cutting. The Ferrari automobile production operations are already lean and mean and when the bean-counters step back and look at the company the Gestione Sportiva is clearly the place where a few noughts could be knocked off the balance sheet. Making economies in racing will, unfortunately, affect the competitiveness of the team unless everyone in F1 has to cut costs, which is why Ferrari has been supporting the FIA in its recent cost-cutting initiatives.

The fastest way to slim the Ferrari budget is to trim the driver salaries. Michael Schumacher earns about $40m a year and is worth every penny but, according to The Mole's experts, the salary is becoming very difficult to justify in the current economic climate.

Michael has the vague possibility of moving to McLaren or to Williams but neither would be keen on some of his contractual demands. And there is also a danger that Schumacher arriving as the team starts to win will reflect more on Schumacher rather than on the team itself. And that does not sell cars, which is what Mercedes-Benz and BMW are in Formula 1 to do.

There is no real need for Michael to move from Ferrari as long as the money on offer is sensible. Michael does not need the cash nor really does he need to prove that he is the biggest earner in the sport. It is obvious. His agenda, if logic triumphs over greed, must be to continue to build a career which will make him the greatest F1 driver of all time. He is aware that if he moves Ferrari will still be able to win with slower (and cheaper) drivers so it is a good time not to be greedy.

Michael has probably never heard of the Reverend Thomas Malthus and what is known as "the law of diminishing returns".

If he had he ought to be worried because using Malthusian logic, Ferrari's biggest problem is not actually the money but rather what it has won so much in recent years that it has almost nothing to gain from more victories. People are getting bored and turning off their televisions. Success is expected.

In other words Ferrari would actually benefit from not winning races for a while.